Yes, it looks bad, but looks can be deceiving.
What is ACTUALLY bad is when a large PERCENTAGE of homes are on the market; simple arithmetic can explain five listings in a fifty-unit building (people move every seven years, one in seven is seven per year; market time four to six months, it's a tad high but not crazy, ok then!)
At your next homeowner's meeting, bring up the suggestion that the building buy one sign that says, "Unit For Sale, Contact Your Agent." No flyer boxes, nada. That will look a lot better than a row of yard signs in varying states of repair lining the road!

That is the same type of question as people asked "why are there so many homes for sale on this street?"
The perfectly good answer you provided is accurate, but in today's market the most venerable market is the attached single family residence. Because more of these units were built and sold at higher prices several years ago, banks are more reluctant to lend on them with small down payments. FHA limits are $411,000.

Condominiums usually have 1st right of refusal provisions or are not on FHA approved lists; therefore you can't purchase at 3.5% down. If that language is removed from condo documents and the homeowners apply to be included on the FHA list, then more people would be able to make the move as was so popular just a few years ago.

The federal government just put a December deadline to become part of the approved list. So, it will really helpful for condo owners to push their associations to make that change and push up volume of sales in the complexs.

PD,

I live in North Riverside and my office is in Westchester. I've been a Real Estate Consultant since 1991 and I understand why you would be concerned.

In my opinion, it depends on the reason why they're moving. If the property is listed in the MLS and the agents are doing a good job advertising it then they should be able to give the reason why they're moving. Without knowing the location, it really shouldn't deter buyers from looking. Actually it may cause a little competition from each seller on pricing and that may cause a buyer to get a good unit for the price.

No it is not bad, However, When there are many units for sale in the same building sellers tend to reduce the price to sell first.and buyers take advantage of that. The same rules apply for any products- offer and demand! Anyhow,Low price do not cure all the issue .Buyers wil pay extra money if the unit is in perfect condition.

It doesn't look bad, as long as there is a ligitimate reason for the group sale. The first question a buyer would ask is " Why are they all selling, and if there is a problem?". Make sure your listing addresses this issue in the agent Remarks section, if it's available in your state.